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Petrofac Limited (PFC)

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monabri
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Re: Petrofac Limited (PFC)

#317273

Postby monabri » June 10th, 2020, 6:34 pm

Pity there are is no contract value in evidence . We have no basis to judge if it is significant work or otherwise.

As for the SFO.? I bought into PFC just before the announcement in typical poor timing ( bad luck?). I feel I should have sold when they briefly reached £6 after the first big drop.
Would I buy nowadays...no (*). Their operating margins have been reducing over the last 10 years suggesting that they are pricing contracts to get work. An operating margin of 7% is not attractive. Cancellation of a recent big contract was nasty. If the SFO were to drop the case tomorrow, I don't think we would see much of a lift. I'm more than happy to be proved wrong.

(*) putting aside the absurdly long SFO investigation. PFC was one of my first HYP buys...I didn't do enough research and, frankly, at the time didn't know what to look for...my mistake/ experience level .The SFO investigation came out of the blue..whether it was suspected as a possible investigation prior to the announcement, I don't know.

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Re: Petrofac Limited (PFC)

#318877

Postby monabri » June 16th, 2020, 5:02 pm

https://www.rigzone.com/news/petrofac_b ... ticle/?amp

"Petrofac revealed Tuesday that its Engineering & Production Services (EPS) division has been awarded a “multi-million dollar” engineering, procurement, construction and commissioning (EPCC) contract by Tatweer Petroleum for an upstream gas project in Bahrain."

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Re: Petrofac Limited (PFC)

#319949

Postby Wizard » June 20th, 2020, 9:48 am

ReallyVeryFoolish wrote:
monabri wrote:https://www.rigzone.com/news/petrofac_bags_multimillion_dollar_bahrain_deal-16-jun-2020-162427-article/?amp

"Petrofac revealed Tuesday that its Engineering & Production Services (EPS) division has been awarded a “multi-million dollar” engineering, procurement, construction and commissioning (EPCC) contract by Tatweer Petroleum for an upstream gas project in Bahrain."

I like PFC a lot as an investment. It's not a company I would care to work for but I am happy to hold shares. At around 200p it's a great entry point. The dividend was about halved soon after the SFO investigation was announced ages ago. The money saved was ear marked to pay for any subsequent SFO actions. Of which there have been precisely none so far. I guess the money is still lying there in the bank. Due to the unprecendted shake down in the industry PFC have naturally suspended dividends for now. In response to a fall off in orders and a massive order cancellation a few weeks ago PFC has responded by large reductions in cost overheads. It's very easy for PFC to do this. They employ a lot of temporary agency people and their centre of gravity is in the middle east and asia where people are often regarded as disposable assets. PFC is highly regarded in the middle east particularly in UAE and Oman, they will bounce back. There's always a chance that a bigger contractor will buy them. I had thought that one of the major asian players would have done so by now. Here I am sitting on a significant looss and I am not adding solely because I have too many PFC shares already. For me, confidenvce remains high. On a three to five year view there's great upside potential and when dividends resume more the better. The SFO mess remains a drag. They have no evidence as far as anyone can tell. The company will prosper no matter what the SFO eventually decide.

RVF

I bought PFC after the big SFO share price collapse, but I am clearly still well down at today's price. However, I do think they know their business well and are well run. I also think if the SFO had any reasonable evidence charges would likely have emerged by now, so on balance I see the delay as being due to the SFO trying to find a way to emerge from the situation without looking foolish again. However, the recovery of Petrofac is surely down to the oil price and I struggle to see that being strong any time soon. On balance I plan to hold PFC for recovery, but it is a tight call which comes down to a good company in a difficult industry.

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Re: Petrofac Limited (PFC)

#320970

Postby daveh » June 24th, 2020, 10:01 am

Trading statement:
https://www.investegate.co.uk/petrofac- ... 00058549Q/

Petrofac issues the following pre-close update on trading ahead of the announcement of its half year results on 11 August 2020, and on the swift and decisive action the Company is taking to respond to the COVID-19 pandemic and sharp fall in oil prices .

· Continuing to safely deliver our projects and operations worldwide
· On track to deliver US$125 million of cost savings in 2020 and up to US$200 million in 2021
· Trading and awards materially impacted by COVID-19 and the sharp fall in oil and gas prices
· New order intake (1) of US$1.0 billion in the year to date
· Net debt (2) of c.US$139 million at 31 May 2020

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Re: Petrofac Limited (PFC)

#332317

Postby PinkDalek » August 11th, 2020, 7:26 am


monabri
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Re: Petrofac Limited (PFC)

#340655

Postby monabri » September 16th, 2020, 2:07 pm

https://www.rigzone.com/news/petrofac_b ... ticle/?amp

"Petrofac’s Engineering and Production Services (EPS) business has revealed that it has bagged a multi-million dollar integrated services contract with Ithaca Energy.

As part of the new five-year deal, Petrofac will integrate operations, maintenance, engineering, construction and onshore and offshore technical support across Ithaca’s North Sea operated asset base. The contract extends Petrofac’s existing working relationship with Ithaca, as well as the duration and breadth of services it provides for the Alba, Captain, Erskine and FPF-1 assets."

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Re: Petrofac Limited (PFC)

#340669

Postby Bouleversee » September 16th, 2020, 3:23 pm

You would think that might give rise to at least a small uptick in the price but alas! no.

Isn't it about time there was some decision on the corruption front? That might help a little.

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Re: Petrofac Limited (PFC)

#340717

Postby monabri » September 16th, 2020, 7:21 pm

ReallyVeryFoolish wrote:
Bouleversee wrote:You would think that might give rise to at least a small uptick in the price but alas! no.

Isn't it about time there was some decision on the corruption front? That might help a little.

IIRC, Wood also has SFO issues dating back to AMEC/FW days. But the divergence recently in PFC and Wood share prices is very unusual in recent times. I watch both firms quite closely and I know of no reasons for Wood shares to be almost 2x the price of PFC shares presently.

Just to add - North Sea is very small beer these days. Such a contract is a flea bite in the overall scheme of things.

RVF


Without looking at the key..which one is which? ; Wood Group v PFC ! (Graph of Total return over the last 3 years).

Image

Or over 5 years which encompasses the time period when PFC got hit by the investigation.

Image

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Re: Petrofac Limited (PFC)

#340723

Postby monabri » September 16th, 2020, 7:31 pm

What's the reasoning behind comparing the shares prices of two companies? The result at the moment is that both companies are pretty dire.

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Re: Petrofac Limited (PFC)

#342755

Postby Bouleversee » September 25th, 2020, 12:21 pm

Dear me, indeed! Could we have some good news for a change. Any reason, other than the market being down generally? Am kicking myself for putting rather too much family money into this stock.

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Re: Petrofac Limited (PFC)

#342764

Postby Dove21 » September 25th, 2020, 12:36 pm

Today's IC shows short interest has climbed to 7.8%. Wood's is at 3.8%.

At least a contributing factor, I would have thought

Dove

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Re: Petrofac Limited (PFC)

#342869

Postby Bouleversee » September 25th, 2020, 7:16 pm

Crikey, it's worse than I thought. My holding is split over 2 ISAs and I've just woken up to the fact that I am losing nearly £20k (around 80%) and that's not including my children's holdings. I looked for news on the IWeb website and this came up:

https://www.markets.iweb-sharedealing.c ... 4&type=bsm

Looks like we could lose all our money. What to do, now?

And it's not the only one for me either, RVF. Very far from it!

What I don't understand is why it was being tipped as a buy as recently as August. I hadn't read anything about all this indebtedness.

I've suddenly lost my appetite, for supper as well as investing. :(

monabri
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Re: Petrofac Limited (PFC)

#342891

Postby monabri » September 25th, 2020, 8:33 pm

Just how long are the SFO going to sit on this? I'm also down about 80% on PFC. The way if is going they will be bought for a song by the US ...well done SFO!

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Re: Petrofac Limited (PFC)

#342899

Postby Bouleversee » September 25th, 2020, 9:18 pm

I'm going to write to my MP. It's outrageous the SFO can sit on this for so long. They are as useless as Action for Fraud. On the other hand, have all these debts got anything to do with that? What do we know about Asfari?

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Re: Petrofac Limited (PFC)

#343084

Postby Bouleversee » September 26th, 2020, 8:03 pm

ReallyVeryFoolish wrote:
Bouleversee wrote:Crikey, it's worse than I thought. My holding is split over 2 ISAs and I've just woken up to the fact that I am losing nearly £20k (around 80%) and that's not including my children's holdings. I looked for news on the IWeb website and this came up:

https://www.markets.iweb-sharedealing.c ... 4&type=bsm

Looks like we could lose all our money. What to do, now?

And it's not the only one for me either, RVF. Very far from it!

What I don't understand is why it was being tipped as a buy as recently as August. I hadn't read anything about all this indebtedness.

I've suddenly lost my appetite, for supper as well as investing. :(

The way I read that article, it's not PFC who are indebted but customers not paying? After the non core business disposals the last couple of years, PFC is pretty much a debt free company IIRC. If PFC aren't getting paid then Wood, KBR, Bechtel, Worley, Jacobs etc..... aren't getting paid either are they? I still don't understand why PFC value has slumped like this and peers haven't. PFC is a well run company with a very flexible and low cost base. And why the suggestion that Asfari is on the way out? Where's the evidence for that? There isn't any?

RVF


Having read it again, all I can say is that it is not very well written. One might conclude that the reason PFC is indebted is because it is not being paid by its own clients but you can't get away from "In turn, Bernstein stated this meant Petrofac now owed the most money to suppliers in its own history." Maybe PFC WAS a debt-free company but it doesn't sound as though that is the case now. However, I cling to the hope that the writer of that article didn't know what he was talking about or someone was trying to manipulate. Why are we not reading more about this in the press if things are so dire?

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Re: Petrofac Limited (PFC)

#343444

Postby Bouleversee » September 28th, 2020, 12:47 pm

Let's hope they get their fingers burnt, the shorters that is. . The price is up 7p today, following the market, but there is a heck of a long way to go. I notice the P/E ratio is 1.66% which is extraordinarily low. I would be tempted to add if I weren't already losing so much.

You might be interested to read this article, which emanates from Simply Wall Street. I haven't clicked on the links as I daresay there is a paywall.

https://uk.finance.yahoo.com/news/petro ... 03867.html

I should be interested to know your views, Monabri.

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Re: Petrofac Limited (PFC)

#343458

Postby Bouleversee » September 28th, 2020, 1:14 pm

Anything to do with oil has come down a lot this year. Look at James Fisher for instance. One of my stalwarts and have held for yonks. Dropped a huge amount this year. Much will depend on their ability to adapt their businesses to new circumstances. Leaving Covid aside, oil will be gradually phased out and renewables and hydrogen etc. will take over. I see that PFC expects to be emissions free by 2030 so they must think they have a long term future. I, on the other hand, will do my best not to be emissions free by then because I would really like to be around to see how it all pans out. In the meantime, I haven't a clue what to do about my investments. I didn't think PFC's last report was so bad as to justify such a fall in price but then I am pretty useless at reading such long documents and sussing out the correct conclusion. Something must have happened that hasn't been made public or shorters are manipulating the price without a valid reason.

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Re: Petrofac Limited (PFC)

#347109

Postby spiderbill » October 12th, 2020, 2:14 pm


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Re: Petrofac Limited (PFC)

#347113

Postby Bouleversee » October 12th, 2020, 2:43 pm

I had rather expected the s.p. to have risen a little after those 2announcements but we have had the reverse. There must be something going on that we don't know about.

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Re: Petrofac Limited (PFC)

#353026

Postby daveh » November 3rd, 2020, 2:45 pm

COMPLETION OF SALE OF 51% INTEREST IN MEXICAN OPERATIONS

https://www.investegate.co.uk/petrofac- ... 41180950E/

Gross cash consideration received on completion was US$82.7 million. In total, Petrofac has received US$120.2 million to date from the sale of its 51% interest in its Mexican operations. Proceeds from the sale will be used to reduce gross debt.


Further consideration of up to US$155.8 million is potentially receivable, comprising:

· US$80.2 million plus interest payable on completion, which is disputed by Perenco. Petrofac will initiate formal legal proceedings against Perenco to recover this balance; and

· Up to US$75.6 million contingent on future milestones, including field development, commercial, service contract transition and fiscal terms.


So it not really complete as the final payment is in dispute and the future milestone payments also look to be at risk if they are already having to take legal proceedings to get paid.


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